S29A Extension Requires Sufficient Cause, Wife's Illness Not Enough For 2½-Year Delay: Himachal Pradesh HC
The Himachal Pradesh High Court on 20 May held that an application under Section 29A of the Arbitration and Conciliation Act, 1996 seeking extension of time is maintainable even after expiry of the arbitral mandate, but such extension can be granted only on proof of “sufficient cause”, consistent with the legislative objective of expeditious arbitral resolution.
A Bench of Justice Virender Singh dismissed a plea filed by landowner Rajender Kumar seeking extension of time to complete arbitral proceedings arising from acquisition of land for widening of National Highway-21. He held:
“....if the application is allowed, merely on the asking of the party, then, there would be no end to the litigation and the object of Section 29A of the Act would be defeated by allowing the application, which is filed after a long gap of time.”
Rajender Kumar approached the High Court seeking extension of time for conclusion of arbitration proceedings before the Divisional Commissioner, Mandi, who was acting as Arbitrator under Section 3G(5) of the National Highways Act.
The arbitral mandate had already terminated on 11 January 2023 upon expiry of the statutory period for making the award, after which the proceedings were kept in abeyance. Kumar moved the Court after more than two years, contending that he could not approach earlier as his wife was undergoing treatment at Chandigarh.
Opposing the plea, the National Highways Authority of India submitted that no extension had been sought within time and that the application, filed after an inordinate delay of over two years, failed to disclose any sufficient cause.
Referring to Section 29A of the Arbitration and Conciliation Act, the Court reiterated that the provision permits extension of time even after expiry of the mandate, but only where justified. It observed:
“The bare perusal of sub-clause (4) of Section 29A of the Act demonstrates that the period can be extended either prior to or after the expiry of the period so specified. Meaning thereby, the time limit for passing the arbitral award can be extended by this Court, even after the expiry of the period so specified in Section 29A (1) and (3) of the Act.”
Relying on the Supreme Court decision in Rohan Builders (India) Private Limited v. Berger Paints India Limited, the High Court held that extension under Section 29A can be granted only upon showing sufficient cause. Explaining the standard, the Court stated:
“'sufficient cause' means the situation or the reason, which is beyond the ordinary control of the litigant/parties to the proceedings”
The Court noted that the application was filed nearly two and a half years after termination of the arbitral mandate and found that the explanation for delay lacked particulars and supporting material. Rejecting the plea, it noted:
“If such type of plea is accepted to extend the period to conclude the arbitration proceedings, then, there would be no end to the proceedings, as every litigant would approach to the Court, with a prayer to extend the time, as and when, he deems fit to do so, the same would be against the legislative intent in enacting Section 29A of the Act.”
Reinforcing the objective of speedy dispute resolution, the Bench further held:
“While deciding the application for extension of time, this Court has to see the fact, as to whether, the applicant is able to make out a case, which falls within the definition of 'sufficient cause' for extension of time, as the legislative intent to expeditious resolution should be kept in mind, which is the fundamental principle.”
Accordingly, the High Court found no sufficient cause for extension of the arbitral mandate and dismissed the application.
For Petitioner: Advocate Madhurika Sekhon Verma
For Respondents: Advocates Shreya Chauhan and Tejasvi Sharma